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Cassandra Moon

UCC § 9.506 debtor name requirements - rejected filing over middle initial

Has anyone dealt with rejected UCC-1 filings under § 9.506? Our bank filed against "Sarah J. Thompson" but the SOS rejected it because her driver's license shows "Sarah Jane Thompson" (full middle name). The collateral is manufacturing equipment worth $180K and we're worried about perfection timing. I thought middle initials were acceptable but apparently not in every case? The rejection notice cited § 9.506 sufficiency requirements. We need to refile ASAP but want to make sure we get the debtor name exactly right this time. Anyone know the specific rule about when initials vs full names matter for UCC filings?

Been doing UCC filings for 8 years and name rejections under § 9.506 still catch me off guard sometimes. The statute says minor errors don't make a filing ineffective, but "minor" is in the eye of the beholder apparently. Sarah J vs Sarah Jane shouldn't matter but here we are.

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Common sense doesn't always align with UCC search logic unfortunately. The automated systems are pretty literal.

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This is why I always tell people to think like a computer when preparing UCC names. Exact matches only.

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Quick update - we refiled with the exact driver's license name and it was accepted same day. Thanks everyone for the advice. Going to implement better name verification procedures going forward to avoid this headache again.

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Smart move on the verification procedures. Those document checking tools really do help prevent these issues.

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Good to hear you got it sorted quickly. These name rejections are always frustrating but at least the fix is straightforward.

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Sophie Footman

Confused about mortgage on building vs UCC filing requirements - help?

I'm working on a commercial deal where we're financing some manufacturing equipment that's going to be installed in a building the borrower owns. The equipment will be bolted down but could theoretically be removed. Our loan committee is split on whether we need a mortgage on the building or if a UCC-1 fixture filing is sufficient. The equipment is worth about $850K and includes some heavy machinery that will require concrete footings. I've seen deals go both ways but want to make sure we're not missing something critical here. The borrower already has an existing mortgage on the property with another lender. What's the standard approach for this type of collateral - mortgage on building vs UCC filing? Any guidance would be appreciated.

Whatever you decide, make sure your collateral description is bulletproof. I've seen too many UCC filings get challenged because the description was too vague about whether the equipment was fixtures or not.

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This is so true. The description needs to be specific enough to identify the collateral but broad enough to cover variations.

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Based on everything discussed here, I'd probably go with the UCC-1 fixture filing approach but also get a subordination agreement from the existing mortgage holder if possible. That gives you the best protection without the complexity of a new mortgage.

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That sounds like a reasonable compromise. I'll talk to our counsel about drafting the subordination request.

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Make sure your counsel reviews the existing mortgage documents first. Sometimes the subordination language is already built in for purchase money security interests.

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Felix Grigori

California UCC liens showing conflicting debtor names - will this void my security interest?

I'm dealing with a major headache on a commercial equipment loan in California. Filed our initial UCC-1 back in March with debtor name as "Pacific Coast Welding LLC" but just discovered the business charter actually shows "Pacific Coast Welding, LLC" (with the comma). Now I'm staring at potential issues with our $340K security interest and wondering if this name discrepancy could invalidate our lien position. The SOS website search pulls up our filing but I'm worried about enforceability if we need to foreclose. Has anyone dealt with California's seriously strict debtor name requirements? The equipment is custom fabrication machinery so we can't afford to have an unperfectable security interest. Should I file a UCC-3 amendment immediately or is this minor punctuation difference not going to kill us legally?

I know everyone's saying file the amendment, but honestly I think you might be overthinking this. A comma difference probably isn't going to void your entire security interest, especially if both names clearly refer to the same entity. California courts aren't completely unreasonable about minor punctuation variations.

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Fair point, I just hate seeing people panic over every minor filing detail. But you're right that the stakes are high enough to justify the precaution.

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The problem is you don't know how unreasonable the court will be until you're already in litigation. By then it's too late to fix it.

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Update us when you get this resolved. I'm dealing with a similar name discrepancy issue on a Texas filing and curious how California handles these amendments. Do they process them pretty quickly?

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Will do. From what I understand California UCC-3 amendments usually process within a few business days if filed online.

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Yeah California's online system is actually pretty efficient for amendments. Much better than their initial filing process.

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Mei Chen

Alabama UCC filing fees doubled since last year - what's everyone paying now?

Just got quoted $25 for a UCC-1 filing in Alabama and nearly fell off my chair. Last time I filed was about 18 months ago and I swear it was around $15. Did Alabama UCC filing fees really jump this much or am I remembering wrong? We're doing a lot more equipment financing deals now and these costs are adding up fast. Anyone else dealing with higher Alabama filing fees lately? Trying to figure out if I should budget differently for our Q2 filings.

Has anyone had luck getting filing fee refunds when the system rejects a UCC-1 for technical reasons? I had one rejected because their server was down during submission but still got charged.

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Yeah refunds are pretty rare. I started using document verification tools after losing money on rejected filings. Better to catch errors upfront than pay twice.

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Same here. Certana's verification caught formatting issues that would have definitely caused rejections. Worth every penny to avoid refiling fees.

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The $25 fee is what it is, but make sure you're not making any debtor name mistakes that could invalidate your whole security interest. I've seen lenders lose six-figure deals because of sloppy UCC filings that didn't match the loan documents exactly.

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Absolutely. We treat every UCC filing like it could end up in court someday. Cross-checking everything against the underlying loan docs is essential.

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That's exactly why automated document checking is so valuable. Upload your loan agreement and UCC-1 together and it flags any inconsistencies immediately. Way better than manual review.

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Nora Brooks

UCC lien search Illinois - debtor name variations causing missed results?

Running into a frustrating issue with UCC lien search Illinois results. I'm doing due diligence on a potential acquisition and the target company has had several name changes over the years. Started as "Midwest Industrial Solutions LLC" in 2019, became "Midwest Industrial Solutions, LLC" (added comma) in 2021, then "MIS Industrial Solutions LLC" in 2023. When I search the Illinois SOS UCC database, I get different results depending on exactly how I type the name. Some searches show 3 active liens, others show 5, and one variation showed 7 total filings. This is making it impossible to get a complete picture of their secured debt. The company's attorney says they've been consistent with their legal name on all filings, but clearly something isn't matching up in the search system. Has anyone dealt with Illinois SOS UCC search being this sensitive to punctuation and name variations? I'm worried I'm missing critical liens that could affect the deal structure.

I've found that searching by secured party name can sometimes reveal filings you miss when searching by debtor name. If you know who their main lenders are, try searching for those lender names and see what comes up. Might catch filings where the debtor name was entered slightly differently.

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That's a clever approach I hadn't thought of. Searching from the lender side to cross-verify the results.

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Just remember that secured party searches can return a lot of results, so you'll need to filter through them carefully to find the relevant ones.

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Final thought - consider reaching out directly to the company's legal counsel and asking for a complete list of all UCC filings they're aware of. They should have records of every filing and can give you the exact names and filing numbers to search for. This can help verify you haven't missed anything important.

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That's probably the best approach. I'll ask their attorney for a comprehensive list and then verify each filing in the Illinois system. Thanks for all the suggestions everyone.

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Good luck with the acquisition! UCC searches are always stressful but sounds like you're being thorough about it.

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